No single ticker was named. Internet & media ETFs are one way for retail investors to get exposure. Not a recommendation.
Valuation dispersion in AI-disrupted EM platforms
The guest argued that indiscriminate sell-offs of software and online platform companies over AI disruption fears have created attractive entry points for high-quality businesses with pricing power and sustainable moats.
The argument
While some sectors like online travel agencies are highly vulnerable to AI disintermediation, software companies with pricing power can leverage AI to supercharge utilization, and platforms with network effects (gaming, social media) or real-world complexity (quick commerce) will see their moats strengthened.
The thesis, stress-tested
✓ What validates it
- ✓Earnings reports showing software companies successfully raising prices for AI-integrated features
- ✓Stabilization or growth in active user metrics for dominant EM social and gaming platforms
▸ Risks discussed
- ▸AI disruption may prove swifter and more destructive than anticipated for legacy software architectures
- ▸Valuations could remain depressed if market sentiment doesn't shift toward active stock selection
Hear it yourself
"interesting opportunities as well. So you've got those two unique opportunities we find for emerging market equity investors. And then on top of that, relative to MSCI World, EM, despite the recent outperformance still is about as cheap as it's been historically against MSCI World. So, that's another interesting aspect for for the asset class. Yeah. I think a lot of times investors forget, like, emerging markets aren't, like, emerging because they're it's like they have characteristics that make them emerging. They have, like, to your point, they have maybe, you know, very different demographics and developed countries."